Government plans new £100m endowment fund to help charities attract social investment

The fund will consist of £60m of repayments of loans made by the now defunct Futurebuilders fund; the remaining £40m will come from the Big Lottery Fund and Big Society Capital

Cabinet Office
Cabinet Office

The government is in talks with the Big Lottery Fund and Big Society Capital about its plans for a new £100m endowment fund that would help charities and social enterprises attract social investment and win public service contracts over the next 10 years.

The endowment, mentioned last week in a speech by Rob Wilson, the Minister for Civil Society, would consist partly of the £60m of repayments of loans made by the now defunct Futurebuilders Fund, set up by the Labour government to help charities bid to deliver services. This was announced in June.

A spokeswoman for the Cabinet Office said a decision had been made in principle that the remaining £40m would come from the Big Lottery Fund and Big Society Capital, the social investment wholesaler. It remained to be decided how much each would contribute, she said.

But a spokesman for the Big Lottery Fund said no formal decision had yet been taken.

"The Big Lottery Fund has been working with the Cabinet Office and Big Society Capital on how we might support small organisations to take advantage of social investment opportunities," he said.

"This is in line with the aims for our work in this area and consistent with our other programmes such as Big Potential and our support for the School for Social Entrepreneurs. Final decisions are expected to be made early in 2015."

A spokeswoman for Big Society Capital said that it was not ready to make any announcement about the fund but it was likely that BSC would invest alongside funds from the endowment rather than directly in the endowment itself.

"It has been in the public domain for a while that we are committed to supporting this section of the market," she said.

She said that BSC hoped to be able to make an announcement on its role in the fund in the near future. 

In an interview with Third Sector last week, Wilson said the new capacity-building fund was part of "a whole series of things I’m trying to put in place that offer levels of support that haven’t been there in the past.

"I hope you can see an emerging picture that different sizes and types of organisation need different types of help, and what I’m trying to do is build a flexible series of finance and support options that will give them the help they need when they need it."

The full interview with the minister will appear in the next edition of Third Sector magazine, out next week.

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